Emissions and climate change, waste and recycling

GRI 302: Energy, GRI 305:
Emissions and climate change

GRI 3-3
Management of material topics

In order to provide their services, Galenica Group companies consume renewable as well as non-renewable resources. These processes generate gaseous, liquid and solid waste products as well as greenhouse gases. Electricity and fuels are the main energy sources used by Galenica. Electricity accounts for 40% of total energy consumption. Transport is the main cause of direct and indirect greenhouse gas emissions at Galenica and is responsible for other pollutant emissions. Greenhouse gases in the atmosphere are primarily responsible for global warming and climate change, with serious consequences for humans, animals and the environment. Galenica therefore attempts to use resources as efficiently as possible, on the basis of economically viable measures, and to reduce the resulting environmental impact as much as possible.

Binding targets agreed with the FOEN

In order to reduce CO₂ intensity and increase energy efficiency, the Alloga sites in Burgdorf, Galexis sites in Lausanne-Ecublens and Niederbipp, and the Bichsel Group agreed on binding targets with the Federal Office for the Environment (FOEN). In return for their commitment, the companies can apply for a refund of the CO₂ incentive tax on fossil fuels or a subsidy to implement sustainability measures, provided they comply with the agreements. The targets are agreed individually based on each site’s potential. Galenica is working with the Energy Agency for Industry (EnAW) to define an efficiency path with various commercially viable measures. As part of the targets agreed with the FOEN, for example, Alloga put a new groundwater heat pump into operation at the beginning of 2022.

Reduce fuel consumption

In order to reduce fuel consumption, pre-wholesale and wholesale companies regularly review and implement energy efficiency measures – both internally and with external logistics partners. This includes the use of commercial vehicles that meet the highest emissions standard (currently Euro VI) for all Group companies and the initiation of joint pilot projects for the use of delivery vehicles with alternative drive systems. At the same time, since 2020 Galexis has been converting its own delivery fleet and introducing more efficient vehicles with a higher load capacity to avoid multiple journeys when large loads are being delivered. External contract drivers are contractually obliged to use only vehicles that meet the Euro V standard or higher. All drivers from Galexis, UFD, Pharmapool, Bichsel and Alloga regularly attend mandatory driver safety training, which aims to teach them an environmentally friendly, fuel-efficient driving style, among other things. Galenica also pursues and supports sustainability initiatives for logistics companies through associations (such as GS1) and in cooperation with public authorities.

Environmental Code of Conduct and mobility concept

The Environmental Code of Conduct applies to all employees of the Galenica Group. This provides guidance on saving energy and making efficient use of natural resources in the workplace and in transport.

Galenica encourages its employees to use public transport and electric vehicles and has implemented specific mobility concepts at some locations, such as the headquarters in Bern. Employees who commute to work by public transport receive a financial contribution towards their travel costs. In January 2022, a further mobility concept was introduced in Lausanne-Ecublens as part of the renovation work at the site. Only limited parking spaces are available for employees. Galexis encourages employees to organise carpools or use public transport to get to work and provides employees with financial support for the use of public transport. In 2022, Galenica amended its Group-wide company vehicle policy in favour of e-mobility. Today, around 12% of company vehicles have electric or hybrid drive systems.

Starting to implement renewable energies in distribution

Galenica wants to promote the use of renewable energies in distribution logistics and has adopted a memorandum of understanding to this effect as part of its distribution strategy. The first vehicle powered by biogas has been in successful use at Galexis since 2021 and a second vehicle was also put into operation at the beginning of 2022. In addition, Galexis carried out initial test drives with an electric vehicle for the local distribution of goods and products. From 2023, Galexis will be putting its first own electric delivery vehicle into operation as a test. In addition, two additional electric delivery vehicles will be in operation via third parties. Charging times remain a major challenge, which means that vehicles are only used up to 50% of their capacity and are therefore inefficient from an economic point of view. Galenica sees great potential in hydrogen technology for lorries and is therefore in the process of identifying the specific steps that need to be taken to implement hydrogen technology in logistics. Discussions have been held with a logistics service provider that already operates several hydrogen-powered lorries in Switzerland about a pilot test with a view to putting them into operation as internal goods transport. A major challenge here is the requirement for temperature-controlled transport in accordance with GDP guidelines, as the air-conditioning system consumes a lot of energy.

Focus on increasing energy efficiency during renovations

When carrying out renovations, Galenica always takes into account measures to improve energy efficiency and looks into the feasibility of installing photovoltaic systems. During the renovation of the Galexis distribution centre in Lausanne-Ecublens, for example, all buildings and roofs were refurbished to improve energy efficiency and a photovoltaic system was installed. A photovoltaic system has also been in operation on the roof of the Alloga building in Burgdorf since 2018, and Galexis plans to install a photovoltaic system at the Niederbipp site in 2023.

In the Service Unit Pharmacies, there is only a very limited choice of energy sources for heating and electricity as almost all the premises are rented. However, electricity consumption can be controlled, which is why Galenica is consistently focusing on energy-saving lighting and the installation of motion detectors when renovating pharmacies.

Preparing for possible electricity and gas shortages

Due to the current tense energy supply situation in Switzerland, Galenica initiated a Group-wide task force in 2022 and defined various energy-saving measures. For example, exterior lighting was switched off at all operating sites, temperatures were reduced in all rooms and motion detectors were installed. The task force has also worked out possible scenarios in the event of an electricity and gas shortage and defined appropriate measures in order to be able to react in an emergency.

Evaluation of the management approach and measures

• Key figures: key environmental figures relating to greenhouse gas emissions and energy consumption by the Group are collected at least once a year in order to check whether the environmental targets are being achieved.
• Galenica’s sustainability objectives form part of its collaboration with partners (suppliers, logistics service providers, service providers) throughout the supply chain.
• Targets agreed with the FOEN: EnAW provides Galenica with annual feedback and recommendations on how to improve energy efficiency and reduce CO₂ intensity.
• ESG topics are part of the contractual agreements in investment planning and the awarding of contracts.
• CDP: Galenica completes the CDP questionnaire once a year. CDP is an international, non-profit organisation that provides the largest and only worldwide environmental database for companies and cities. Its aim is to encourage as many companies as possible to disclose their impact on the environment and natural resources. This information is collected on behalf of more than 680 institutional investors, who together represent more than USD 130 trillion in assets. In 2022, as in the previous year, Galenica ranked C in its level of engagement score. This certifies that the Galenica Group understands how environmental issues affect the business model. The results are published at www.cdp.net.

GRI 302-1
Energy consumption within the organisation

Galenica discloses the total energy consumption within the organisation as well as energy consumption from non-renewable and renewable sources in the key environmental figures.

GRI 302-2
Energy consumption outside of the organisation

The declared energy consumption outside of the organisation is limited to downstream transport and distribution and is shown in the key environmental figures.

GRI 302-3
Energy intensity

Galenica uses the number of full-time equivalents (FTEs) as the organisation-specific parameter to calculate the energy intensity ratio. The quotient takes into account the energy consumption within the organisation and includes the following types of energy: fuels, electricity and heat consumption. Energy intensity is shown in the key environmental figures.

GRI 305-1
Direct (Scope 1) GHG emissions

Galenica discloses direct (Scope 1) greenhouse gas (GHG) emissions as well as further information on the standards, methods and assumptions used in the key environmental figures.

GRI 305-2
Energy indirect (Scope 2) GHG emissions

Energy indirect (Scope 2) GHG emissions as well as information on the standards, methods and assumptions used are disclosed in the key environmental figures.

GRI 305-3
Other indirect (Scope 3) GHG emissions

Other reported indirect (Scope 3) GHG emissions include third-party fuel consumption and are shown in the key environmental figures. There you will also find further information about standards, methods and assumptions.

GRI 306:
Waste and recycling

GRI 3-3, GRI 306-1, GRI 306-2
Management of material topics

Alongside conventional municipal waste (mainly packaging materials), the Galenica Group also produces medical and chemical waste. In Switzerland, expired or surplus medication is classified as hazardous waste and may not be disposed of with conventional industrial waste. Hazardous waste entails both disposal costs and environmental and health risks. Proper disposal is therefore key to protecting the environment, animals and people. Waste can be disposed of in different ways, depending on the type of waste. Waste incineration generates harmful greenhouse gas emissions, but in Switzerland some of the heat generated is also used for district heating or for electricity production. The recycling of waste products and raw materials has positive effects on the environment, such as the avoidance of greenhouse gas emissions and the conservation of scarce natural resources. Almost half of waste is recycled at Galenica. Galenica also strives to reduce and, where possible, prevent waste.

Proper disposal of returned medications

The pharmacies and logistics companies in the Galenica Group take back and properly dispose of expired or unused medications. In pharmacies, this is done in accordance with internal quality management processes. The pharmacists perform an initial triage of the returned medications and sort the products according to specific criteria. They focus particularly on critical ingredients (such as heavy metals, solvents or highly active substances), but also on the special characteristics of the dosage form (such as gas pressure vessels). After this pre-selection process, the drugs are disposed of properly at a conventional incineration plant or in a specially designed high-temperature furnace. The disposal of controlled substances such as narcotics must be documented by pharmacists and reported to Swissmedic. The GDP guidelines, which Alloga, Unione, Pharmapool and Galexis have signed up to, also provide instructions on how to handle returns. The actual disposal of expired and unused medications is carried out by third parties, with the exception of Medifilm, which is the only company in the Galenica Group with an approval for hazardous waste disposal.

For safety reasons, all returned drugs are disposed of without exception, even if they have not yet expired and/or the packaging is still intact. Controlled disposal prevents people or animals from coming into contact with potentially hazardous pharmaceutical waste, such as in torn rubbish bags at the roadside or in the form of contamination. Pharmacies therefore make a valuable contribution to the environmentally friendly and controlled disposal of hazardous waste. In addition, all Galenica Group pharmacies provide only biodegradable plastic bags to their customers.

The Service Unit Wholesale & Logistics is continuously investigating additional ways of reducing waste. The use of recycled packaging is an effective measure; 94% of deliveries are already made in reusable, recycled storage containers. The remaining 6% is delivered in recyclable cardboard packaging.

Environmental Code of Conduct

The Environmental Code of Conduct contains guidelines on waste separation for all employees who work in the office. In addition, new employees receive a leaflet on waste management and recycling when they join the Group.

Evaluation of the management approach and measures

• Key figures: key environmental figures relating to Group waste are collected at least once a year in order to check whether the environmental targets are being achieved.
• Quality management: compliance with quality management processes is monitored on an ongoing basis.

GRI 306-3
Waste generated

Galenica discloses the total weight of waste generated and a breakdown by composition of waste in its key environmental figures.

GRI 306-5
Waste directed to disposal

In its key environmental figures, Galenica reports waste disposed of using the following disposal methods: incineration, hazardous waste incineration and recycling.